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The Business Case: Coursework for Innovative Solutions for Aging Populations

I am participating in an massive online open course (MOOC) from the University of Copenhagen and Copenhagen Business School on the topic of Innovating Solutions for Aging Populations.

The free course is offered through Coursera; it started June 6th and runs until July 17th. You can read more about the course and sign up for future offerings at: https://www.coursera.org/learn/health-care-innovation

Week 4:  The Business Case

This module will begin with an introduction to ethnography as a tool to analyse user needs. You will also hear about how firms can position themselves to benefit from innovation, and you will be introduced to intellectual property rights and competitive analysis. Finally you will learn how health technology should be assessed. In the lessons the Digirehab case from module 3 will be used as an example.

Lesson 1:  Understanding user needs – Ethnographic methods

Right off the bat, I was surprised by some of the content of this week’s lecture. They start by saying how technology is a key driver for rising health care costs (stating new technology explained 50% of the increase in cost), that technology has not disrupted health care organization, and health care technology has failed to make health care more efficient.

Warning – side soap box piece below:

I gotta say, while there is not strong evidence on the benefits of eHealth technology (which is a very broad discipline ranging from electronic health records to online health information to assistive robotics in the home), these statements really surprised me and my initial hunch is that only part of the evidence is being used for these statements.For example, it is well-known that the initial costs of eHealth technology can be high, and it also has been documented that it takes an average of 7 years for institutions to start to see returns on investment (and this is also influenced by the needed change in organization structure, workflows, attitudes, and learning and using new skills). And I have heard many more times that the increase in chronic conditions and noncommunicable diseases accounts for rising health care costs, not technology. And, finally, if one is only looking at efficiency as an evaluation outcome for technology, they are missing the rest of the story. And if the focus of innovating health care is on efficiency alone, I think a lot of us would be gravely disappointed. For example, it is more efficient for a nurse aid or carer to bathe an older person with mobility difficulties, than to train and encourage the person to do it themselves. It will take more time and effort, and may not be done as thoroughly, but I wouldn’t say it is necessarily better. Research in this area should examine efficiency, effectiveness, efficacy, and satisfaction:

  • Effectiveness is the ability to achieve the desired outcome (e.g. offer rehabilitation to citizens)
  • Efficiency is the ability to effectively use the intervention (e.g. technology use that matches current best practices)
  • Efficacy is the ability to produce the desired effects (e.g. citizen achieves rehabilitation goals), and
  • Satisfaction is related to useability, user acceptance of and satisfaction with the intervention (e.g. the health professionals and/or the citizen)

And then the lecturer revealed her perspective (and why the data she presented was skewed in that direction). She stated that health care is still centered on physicians – they decide how care is organized. (I guess she has not heard of/is not on board with person-centred or personalized care, and may be resistant to the changing care paradigm where patients are more empowered in their own self-care, thus reducing the physician’s authority over another individual’s life). And then she gave the example of the car industry, where technology disrupted and standardized production, making cars cheaper and better. Uh… health and social care for humans is not the same as the car industry, which was completely a commercial, for-profit industry. And, would we really want our health care systems to have the same fate as the failed car industry in the US??! Ethnography is th study of people and cultures, but it seems this lecturer focused on industrial culture. Finally, this lecture showed a video of a new programme in the Netherlands where dance is being used as an alternative form of exercise in care homes – and she talked about how this is innovative and will disrupt health care.

Haven’t programmes like this been used before? Sure, they are not in every care home, but, while innovative, this is not such a ground-breaking idea. Nor is it a technology. Nor is it a proposed solution to her initially introduced problems – which are that technology is not shown to be efficient, has not disrupted care organization, and is responsible for increasing care costs. As you can tell, this is not my favorite lecture. I didn’t think the content was very coherent (or even correct), and I don’t think she gave much of an insight into the field of ethnography or really explained how it is used when developing business cases.

Quiz

Q1. How much (in percent) of the increased costs in healthcare is explained by technology?

A1. 50% (but you read my opinions on that earlier…)

Q2. What is ethnography?

A2. A method to describe what people do (well… it’s actually the scientific study of people, societies, and cultures)

Q3. When you conduct an ethnographic study, you make extensive notes. The main purpose of these notes are:

A3. To analyse what you observed (in ethnographic studies, you use a mixed method of observations, interviews, field notes, and possibly surveys – the goal is to gather as much unbiased information as possible to later give insight into the people, society, and culture being studied. You can tell I did not enjoy this lecture.).

 

Lecture 2:  Value capturing

This lecture focused more on practical aspects of innovation in business, such as how to determine market share, profit projections, search for patents, etc. By value capturing, they are referring to the profits the innovator can generate by placing a new innovation on the market. The lecture expanded upon the process leading up to a market-ready solution (the design, market analysis, complimentary assets, etc.). Complimentary assets are the requirements needed to commercialize the innovation, including marketing, manufacturing, complementing technologies, distribution, and service. The second half of this lecture focused on Intellectual Property, meaning patents, trademarks, copyrights, and industrial design.

Quiz

Q1. In the framework for capturing value from innovation, three overall categories are presented: Strategic, Institutional and Non-market tools. Please select the tools that belong to the Strategic category.

A1. Lead-time, complexity, complimentary assets, and secrecy

Q2. Which complementary assets did Coca Cola and Pepsi use to beat RC cola to the market? 

A2. Superior marketing capabilities and brand name recognition

Q3. Why could lead time be important in the case of DigiRehab? 

A3. Because DigiRehab’s solution imposes a high switching cost for customers, as using such solutions require training of personnel

Q4. Please select the three pre-requirements for a patent application. 

A4. Novelty, Inventive step, Industrially applicable

Q5. What type of intellectual property right (IP) is used to protect technological innovations?

A5. Patents

Q6. Some intellectual property rights (IPs) require that the inventor has not made the invention public prior to handing in the application. Select the two IPs that require this 

A6. Patents and industrial designs

Q7. In numbers, what is the most common registered type of intellectual property right (IP)?

A7. Trademarks

Lecture 3:  Competitive Analysis

The video lectures on competitive analysis focused around analyzing competition for a product launch, identifying potential threats, and looking at challenges posed by competitors. The main point of the lectures helps the learner to think about strategy and if the company is viable.

Ideally, an entrepreneur will want to find a product and a set of customers which allows you to operate without too much competition:  the less competition, the better. This can be quite difficult with the growing market of products and services aimed at aging adults… The lectures talk about going for smaller markets with less competition and to have a unique product – a product which delivers something that other products can’t or in a way that other products/services can’t.

Quiz

Q1. What is a competitor?

A1. Someone who offers a product which your customers consider as a good alternative to yours

Q2. What is the likely result for you if a competitor lowers his price of the product while your price is unchanged?

A2. You will have fewer customers and earn less

Q3. How do you best avoid competition?

A3. By having a better product

There are 2 archetype strategies to use in a competitive market:  1) beat the competitors on price (cost leadership) and 2) sustain or develop a product that is better than competing products in at least one aspect (differentiation). Low-cost airlines and discount stores are examples of the cost leadership strategy, and apps for Android or iOS (Apple) phones would be examples of using a differentiation strategy.

Quiz

Q1. Which of the following strategies is not one of generic competitive strategies?

A1. Collaboration

Q2. What is a monopolist?

A2. A seller of a product with no competing products

Q3. In which of the following situations would you expect a supplier (of a product that you need to buy) to earn the highest profit from trading with you?

A3. He is the only supplier of that

The third part of this lecture focused on competencies. These include the abilities to develop, manufacture, and to sell their product – above and beyond the ability to create a new product, but the capability to market the product and make a company successful.

The world is full of ideas. The scarce resource is the competences to turn them into business. 

Quiz

Q1. If you are the first company to offer a certain popular product, you would expect that:

A1. many other companies will try to get a part of the market

Q2. If you – after some time as a monopolist – experience competition, and realize that you will have a hard time surviving this competition, you should:

A2. consider selling your company (but I like that calling the police was one of the possible answers 🙂 )

Q3. Competitive Analysis in general deals with:

A3. how to behave as a company confronted with competition

The final part of this week’s lecture was on health technical assessment – how to decide which innovations in the health sector to adopt or not. Economic evaluation will be one important decision-making tool. The lecture discussed how most Western countries spend 10-15% of their national income on health care and how health systems are facing challenges to physically and financially provide health services to their populations (population increases, growing numbers of people living with chronic and multiple noncommunicable diseases, and population aging are main contributing factors to these challenges). Economic evaluations help these health systems to evaluate where to spend their limited budget for the best possible impact.

A multidisciplinary approach often used for evaluating the cost and benefits of technology is called health technology assessment (HTA). EUNETHTA, the European Network for Health Technology Assessment, defines HTA as:

a multidisciplinary process that summarizes information about medical, social, economic, and ethical issues related to the use of a health technology in a systematic, transparent, unbiased, robust manner.

Quiz

Q1. What is the relation between Health Technical Assessment (HTA) and economic evaluation?

A1. Economic evaluation is a part of HTA

Q2. What type of information is provided to decision makers by an economic evaluation of an innovation?

A2. Whether it provides better value for money

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